What is a Cell Tower Lease Buyout?

What is a Cell Tower Lease Buyout?

At some point in your ownership of a cell tower lease, people will approach to for a cell tower lease buyout. Consider using it as a means to generate some fast, extra income or avoid any potential risks that will affect your income generated from leasing out the cell site.

You can sell the lease you have via a buyout. It simply means you’re selling the rights to collect any rent in the future generated by leasing your cell tower in return for a large payment quickly.  If you are considering a cell tower lease buyout, there are few things to consider before making the decisions, so you can make an educated decision. We will go through a few of the basics below.

Why should you consider a Cell Tower Lease Buyout?

There’s plenty of positive and negative reasons on whether you should sell your lease via buyout or not. The sale of the lease is not a proverbial silver bullet that can fix all you problems. The situations can vary from each wireless landlord to another. It’s worth evaluating both positive and negative aspects before any decisions are made

One big payment or spread out over the next 30 years?

Just like how you win the lottery, you have the choice between having one large payment or portions of the money distributed over the next 30 years by monthly payments. This applies to the cell tower lease buyouts too.

Naturally, the wireless carriers would want you to take the easiest option and do monthly payments. At the end of the day, it is your choice to make but their preference is due to keeping you cooperative.

Consider the following factors in relation to a cell tower lease buyouts:

How fast do you need the cash? Today? Do you plan on retiring? Are you planning on keeping the property for the next three decades? Will you be able to handle any risks that the lease can be terminated within the next 30 to 90 days?

Sell Your Property Twice

If you are considering selling the property you own in the future, then seriously take into consideration selling both i.e. the lease along with the building, individually. This way you can maximize the profit you make.

Depending on the real estate value of the property along with any improvements on your land, the price should be high. Moreover, it also accommodates a wireless facility, so that will add more value.

Another reason why you should sell your properties individually, is because the wireless facility has the potential of being worth a lot more than the original property. It’s a common mistake made when real estate buyers fail to recognize and appreciate the real value of a wireless cell site, and it can be discounted from the transaction of the real estate. Which is definitely not good. When you plan on selling, sell both individually, to maximize your profit.

Consider the Factors that entail  A Cower Lease Buyout

Plenty of landlords finds that receiving the large sum of money asap i.e. today helps them. For example, injecting into their businesses so that their business can grow or pay off a debt to make their current financial situation more ideal.  The 30- Day Termination clause stops landlords from getting any loans for the cell sites future revenue. Banks find this risky because carriers can terminate the contract at any time they want, so they refuse landlords for loans. As consequence, the only source instant revenue will be a cell tower lease buyout.

Age?

Depending on your age you can really benefit from a cell tower lease buyout, especially if you’re young. You can have this doled out monthly for the upcoming fifty years ahead. Consider this as an extra job which you don’t have to work for. Otherwise, you can take the full amount of immediately and use it for your retirement.

Tax

Tax is involved upon the sale of the lease via a buyout. It’s advised to approach specialists to get a consultation, to avoid any tax-related consequences.

Prices Can Vary

The same as any other commodity, prices will shift based on various amounts of factors that will influence it.  For example available buyers, economic conditions.

Chances Of Losing Money by Termination of Lease

A carrier can deactivate your site but the chances of that are extremely low. It’s as unlikely as having your house on fire and having to use the fire insurance when it’s statistically low. There is no insurance to cover any loss of revenue as a landlord.  Via a buyout of your lease all risk of loss transfers to the new lease owner. Regardless of any event or incident, anything in relation to the lease will the new owner’s problem to deal with.

Moreover, another concern that transfers onto the new lease owner is the chances of the wireless carrier terminating the lease at any time.

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